Cryptyk’s Token Economics: Why CTK is a Good Long-Term HODL

Update (January 7, 2019): Since publication of this article, the Cryptyk public sale is live until February 2019. Visit the Cryptyk site for more information.

While today’s tech giants — Google, Amazon, and Facebook — realized the value of big data long ago, it seems that the majority of society has only just begun to wake up to the reality of our modern digital world.

Big data is the strongest force driving innovation in machine learning and general artificial intelligence – unquestionably the most important field of our time. (Yes, even more important than blockchain.)

At the same time, however, the lack of control and security each of us has with respect to our personal data is alarming. Hackers have been exploiting security flaws in centralized databases at an increasing rate, leaving just about all of us vulnerable to identity theft, fraud, and various other cyber crimes.

As much as we might want it to, technological progress isn’t going to slow down. The amount of data that needs to be securely stored isn’t going to be diminished anytime soon either. As a result of those two truths, there is an incredible need for innovative data storage solutionsto hit the market, and soon.

This article will go into more depth on that value proposition, explaining the Cryptyk business model and why CTK tokens are one of the best investment opportunities available to the public in the growing cyber security industry.

Who Will Use Cryptyk’s CTK Tokens?

Cryptyk employs a hybrid blockchain solutionin order to provide users with a decentralized, enterprise-class cloud storage and sharing platform that’s far more secure than existing solutions such as Google Drive, Amazon S3, Apple iCloud, and Dropbox.

At the heart of the platform is the CTK token — a utility token whose value is directly determined by customer adoption and use of Cryptyk products. In other words, the more useful Cryptyk’s platform and security services are for customers, the more valuable CTK tokens will be.

Before getting to the actual use cases, it’s helpful to have an idea of the target demographic for high-security cloud storage and how Cryptyk plans to reach them. The three types of customers that will most impact future demand for CTK are large enterprise customers, small-medium businesses (SMBs), and individual public customers.

To meet the needs of each group, Cryptyk offers a product suite with three tiers – Lite, Pro, and Enterprise.

The Lite and Pro versions will be great for spreading adoption of the Cryptyk platform, but the Enterprise package is where the real opportunity lies.

Large businesses — specifically those in financial services, banking, investment, legal, and insurance — store humongous amounts of confidential data for which security is paramount. Enterprise offers the full suite of next-generation security features from Cryptyk’s platform, including data leak prevention, geofencing, predictive AI threat anticipation, and file tracking, all of which are geared towards meeting specific enterprise needs.

And so, enterprises that want to significantly reduce their risk of a data breach will very likely become Cryptyk’s biggest users.

(Note for technical readers: Cryptyk node setup reduces the relative attack surface to less than 4% BEFORE they wrap it in immutable blockchain auditing. You can find the calculations in the project’s technical whitepaper.)

Once an enterprise customer is acquired, every customer of that enterprise will be introduced to Cryptyk organically when they access their data stored on the VAULT blockchain. That means that enterprise customers provide a means for achieving viral growth with individuals and small-medium businesses, in addition to the revenue streams they contribute to directly.

Needless to say, this new cyber security economy is equipped with a built-in growth hacking mechanism that would make even the best marketing professionals envious.

Cryptyk’s Token Ecosystem

Now that we’ve established who will buy Cryptyk products and how they will be exposed to the platform, it’s time to look into the actual use cases for CTK tokens.

As far as end customers are concerned, this part is actually quite simple. CTK tokens will be the de-facto means of paying for Cryptyk’s Pro and Enterprise security and storage products shown in the section above. (Note: Customers can purchase products with USD, but it is automatically converted into CTK tokens at the current exchange rate.)

Total CTK token supply will be capped at 750 million tokens, making demand the main factor that determines token value. As more and more customers join the Cryptyk platform and pay for their subscriptions with CTK tokens, the increasing demand will bring the token value right up along with it.

This is the fundamental difference between utility tokens and securities: for a utility token, demand grows as product revenue grows, while demand is mostly a reflection of market sentiment in the case of securities.

The CTK economy has been structured such that product utility and customer participation will be more significant to CTK value than speculative market effects. Hence investing in the CTK utility token offers more stable long-term growth, less price volatility and more immediate returns on investment.

Looking Long-Term — Should You HODL CTK?

Considering that CTK’s value depends on the success of the Cryptyk platform, analyzing whether or not CTK is a good investment is practically the same as analyzing whether Cryptyk’s products are useful and likely to generate substantial revenue.

When it comes to platform utility, Cryptyk appears to have several significant advantages over their competition. Their combination of cloud storage and cutting-edge cyber security makes them a one-stop shop for businesses of all sizes that need to store confidential data.

Furthermore, the veteran Cryptyk team developed a working beta of the technology over two years before they even thought of launching an ICO. They tested it against 50 international hackers and industry specialists last year.

The one hacker team that managed to get a virus on the distributed storage platform did so before the blockchain auditing component was added, and they still found that the virus was frozen in separate encrypted pieces and could not execute a single line of code. You can read more about how this was accomplished in this article.

To give you an idea of how well their hybrid blockchain stacks up to the competition, it’s worth noting that Cryptyk’s solution reduces the potential attack surface for hackers to less than 0.01% of that of a centralized network — a number which blows away even the other blockchain storage platforms such as Siacoin, Storj, and Filecoin.

While we’re on the topic of those other blockchain file storage platforms, it’s also worth comparing their latency to that of Cryptyk. And that comparison is favorable to Cryptyk too, as the other platforms mentioned all have large access latency — commonly in the range of 30-60 seconds — whereas Cryptyk’s platforms exhibits access latency under 200 milliseconds.

Importantly, that figure is comparable to centralized cloud storage platforms, meaning that Cryptyk can compete to offer real-time, enterprise-wide collaboration on applications that other blockchain platforms simply cannot.

Then there’s the matter of costliness. All of Cryptyk’s technological advantages will be for naught if the product line isn’t cost-efficient for customers. But as it turns out, this is another positive point for Cryptk. Based on market research discussed in the project’s business whitepaper, the Cryptyk all-in-one solution is typically under 50% of the total cost a consumer would pay for an equivalent multi-product solution.

To emphasize: Cryptyk is the first single-vendor solution to all security threats, no other add-ons or extra services are required.

Not only that, but customers also have the ability to increase cost savings over time by investing in CTK tokens early on and holding them, driving up the token’s value while the price of Cryptyk products remains fixed in fiat currency.

Cryptyk’s early alliance partners foresee purchasing several months of subscriptions for each of their employees, and seeing their entire security budget returned to them as the value of the CTK increases with every new subscription. Again, this effectively makes their satisfied customers their greatest evangelists.

All things considered, Cryptyk’s platform is engineered to be the leading cloud storage platform for any consumers who value security and performance.

The final feature of the platform that makes CTK such a high-potential investment is its viral network effects. There’s the ability to convert the customers of Cryptyk’s enterprise customers directly into Cryptyk customers. But there are also network effects enabled by the CTK token itself — investor adoption via conversion of customers, and customer adoption via conversion of investors.

In other words, Cryptyk users are incentivized to invest in CTK tokens, while CTK token holders are incentivized to use Cryptyk’s cloud storage and security products and recommend them to their peers in the enterprise market.

Conclusion

There are a lot of upsides to investing in utility tokens. The key to successful long-term investing is finding the companies who are developing legitimately useful products.

For forward-thinking investors who recognize the trends in cloud storage and in cyber security, Cryptyk is a project worth taking a chance on.

You can find more information about Cryptyk and token sale details on the project’s official website.

About Daniel Frumkin

Daniel began his career as a mechanical engineer but has now transitioned into working full-time in the cryptocurrency space. Besides writing for Invest In Blockchain, Daniel also works on several other educational projects including Coins2Learn, a cryptocurrency market simulator platform.

6 Comments

Bakra

I’m afraid I disagree with a lot of your analysis. Cryptyk’s solution suffers from the following issues:

1. They were unable to get much traction with customers and investors before they ‘adopted’ blockchain. It’s simply a repackaging of an older, traditional cloud solution. The need for blockchain here is tenuous at best.

2. They’re in a very crowded space. Cloud and enterprise storage has lots and lots of established and small players. It was crowded in 2012 and even more so now. Talk to the people at Box, Microsoft, Google, AWS, etc., etc., to hear how brutal the space is. There a reason why no traditional VC would touch their solution.

3. Speaking of their Sentry product, the security layer they add, that’s a very crowded and competitive space. So they’re at the cusp of 2 very tough spaces.

4. Using crypto to entice enterprise customers to use and pay for services is unrealistic. The crypto economics are dubious.

Mel from Cryptyk

In response to Bakra, who we appreciate for giving us feedback and points to clarify:

1.) The timeline here is a little different than you say. True, our platform was originally devised by our CEO to create only a secure online storage solution, specifically a wallet (half his bitcoin holdings had been hacked) using the distributed VAULT technology. When Dr. Weigold and our board member Indra Singhal were initially seeking funding, both Sequoia Capital and Silicon Valley Bank independently liked the idea, but desired to have it vetted by a security expert they had worked with and trusted. Both organizations independently pointed our team to Raghu Kotha, one of the top fintech white hat hackers in America, who audits all the major American banks yearly. Raghu (who was an old colleague of Indra) not only approved the idea but decided to become our CTO and lead the team to build the platform BETA.

Mel from Cryptyk

(continued)
Raghu realized that the VAULT solution could be adjusted to work with any file or data type (not just crypto wallet keys), and solved 3/5 enterprise cloud security threats: hacking, viral, server failure. Him and Dr. weigold also realized that an additional platform specifically leveraging Blockchain’s immutable ledger could tackle the final 2/5 threats: Intercept threats, and Internal threats. This would make us a complete, but uniquely secure, CASB.

Mel from Cryptyk

The Cryptyk blockchain controls all file permissions, and is also a perfect ledger of all user activity, and file access/editing/sharing events. Part of our relationship with IBM is to have AI monitor this blockchain and perform real time auditing of all activity, effectively allowing prediction of unusual or malicious internal behavior. Now, before our token sale, Cryptyk entered a 2-year stealth mode, the team built the working BETA of the platform and testing it to make sure our idea would be successful. Perhaps this period is what you refer to when we ‘did not get much traction’. Even in stealth, we managed to make several alliance partners and pre-customers simply by going to security conferences and talking with select individuals about our product.

Mel from Cryptyk

As proof of traction, I’m going to point you to a published interview about Cryptyk with Bob Bender. Bob is the CTO of one of America’s largest credit unions, a self proclaimed security geek, and a charting founder and Advisory Board member of the National Credit Union — Information Sharing and Analysis Organization (NCU-ISAO), a voice well known in the cyber security conference space. He talks about our technology and economics in depth, and why they are a paradigm shift for IT and Security departments here. read it on medium here: http://cryptyk.press/Bender_CTO_Interview

Mel from Cryptyk

(continued 3)
As proof of traction, I’m going to point you to a published interview about Cryptyk with Bob Bender. Bob is the CTO of one of America’s largest credit unions, a self proclaimed security geek, and a charting founder and Advisory Board member of the National Credit Union — Information Sharing and Analysis Organization (NCU-ISAO), a voice well known in the cyber security conference space. He talks about our technology and economics in depth, and why they are a paradigm shift for IT and Security departments here. read it on medium here: http://cryptyk.press/Bender_CTO_Interview